Wednesday, April 17, 2024

Why are outrage and ignorance so highly correlated?

From There's a reason Caitlyn Clark isn't making the big bucks by Tom Knighton.  I have little interest in sports in general, compensation in sports in particular, and the imbalances of compensation between men and women's leagues at all.  I just don't spend time or money in this area.

But I am interested in economics and am always frustrated with ideological zealots demonstrate profound ignorance.  Once again, some ignorant fanatics have become incensed by economic realities.  From Knighton.

Sports superstardom has always been a ticket to big money. Look at the salaries that elite professional athletes make, for example. Contracts for hundreds of millions aren’t uncommon in the NFL, NBA, or MLB. I’m not even talking about the future Hall of Famers, necessarily, either.

Kirk Cousins, for example, is a very good football player, but there’s not a lot of talk of him being inducted into Canton. Despite that, he signed a $185 million contract with the Atlanta Falcons.

But Caitlyn Clark has the kind of hype surrounding her that few athletes ever enjoy. Sure, we’ve seen college phenoms burn out quickly, but they still tend to get paid.

Clark, however, is looking at a whopping $76,000 per year, and some people are big mad about it.

The Today show’s Hoda Kotb was in a fine froth on Tuesday when she found out how much WNBA rookie Caitlin Clark will be making. Clark on Monday became the WNBA’s #1 overall draft pick, and immediately signed with the Indiana Fever for $338,000, which would be a low salary in the NBA for one year. But Clark’s contract was for four years, meaning that she will likely be the WNBA’s standout player until Old Joe Biden is 86 years old for the decidedly workaday sum of $76,535.

An enraged Kotb sputtered: “For somebody who is now the face of women’s basketball, it seemed kind of ridiculous.” And in comparison to what NBA players make, it is. Victor Wembanyama, who was the #1 pick in 2023’s NBA draft, signed a slightly more lucrative deal than Clark’s; Wembanyama will be pulling down a cool $55 million.

Kotb continued: “There’s just something about this that’s so disturbing. I mean, I picture all the little girls with signs that say, ‘Caitlin!’ but this is what her contract is worth?” Her cohost, Savannah Guthrie, held out hope for better days, saying wistfully: “Hopefully the payday is coming, too.”

Kotb returned to the subject later, on “Today with Hoda & Jenna,” where she said: “I was like, ‘Ah! What’s she gonna get paid?’ Because finally, you can get a real paycheck, and then I saw it, and I was like, ‘This can’t be right.'” According to the New York Post, Kotb “read Clark’s starting salary of $76,535 and asked, ‘So this is what the No. 1 player, who’s now at the WNBA, [is earning]?’” 

There’s a lot of concern with what Clark is starting with compared to the NBA’s number one pick, who got a $12.1 million payday. 

The Babylon Bee jokes about the "Women's Soccer Team Sues to Overturn Unjust Law of Supply and Demand."  Its why so many of the chattering Mandarin Class come across as Marxists.  No respect for property or markets.  

Knighton has some of the numbers.

For one, the WNBA has never turned an actual profit. It’s subsidized by the NBA to a significant degree despite making revenue. In 2019, it made $60 million in revenue, dispersing $12.3 million to teams.

[snip]

Yet let’s go back to 2019 for a moment, the year the WNBA made $60 million. How much did the NBA make? It made $7.92 billion.

That’s 132 times what the WNBA made, plus the were subsidizing a whole other league.

This matters because while Clark may be a once-in-a-generation talent, she plays in a league that sees its most popular team get an average attendance in 2024 just over half of what the NBA’s least popular team gets.

And 2024 was reportedly a very, very good year for the WNBA.

And its not about sexism.

Some people want to make this about sexism, but it’s not. It’s simple economics. If it were purely about sex, then why is it the higher-paid professional men’s lacrosse players are making around $35,000 a year in salary?

Some sports are popular and have a mass audience willing to pay a lot of money for attendance or viewership.  Some sports don't regardless of sex.  

That a phenomenal talent has risen in a league with little viewership, indeed a league which could not afford to pay her what it is already doing were it not subsidies from other leagues.  

It is just reality.  For those who want to become all emotional and declarative such as Hoda Kotb and Savannah Guthrie, there is an easy solution as Knighton points out.  Get involved in the league.  Pay to go to games.  Encourage other people to put their time and money where Kotb's emotional interests are.  

Otherwise, this is all either raw ignorance or performative and senseless outrage.  Or a combination.  

Everyone's compensation is a product of both how good we are at what we do combined with how much others are willing to pay for what we are able to do.  The Marxist labor theory of value is still in circulation among the emotional chattering class but it has never survived the brute test of reality.  Someone's work is worth only as rare (quality) it is in a market which demands it and is willing to pay for it.

It is a paradox.  The neo-Marxists of the Mandarin Class really hate the market but the market requires wonderful prosocial behaviors such as effort and excellence and cooperation and trust and raises the quality of life for everyone whereas the labor theory of value has only ever led to poverty and collapse.  

UPDATE:  As always, Babylon Bee manages to nail it.  Both accurately and with humor.
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